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Food for Thought

For a safe, smart way to invest in China, Jim Cramer recommended Yum! Brands ( YUM) Tuesday on his "Mad Money" TV show.

Yum!, which owns Taco Bell, Pizza Hut and Kentucky Fried Chicken, may have saturated the U.S. market, said Cramer, but it has far from saturated the market in China.

The company has 2280 stores in China, said Cramer, and he expects China to generate 35% of Yum!'s growth through 2007.

Additionally, in 2004, 15% of Yum!'s operating profit came from China, said Cramer.

By 2007, Cramer expects that number to be 25%.

In response to a question about Starbucks ( SBUX) as a play on China, Cramer said the company doesn't yet have the critical mass necessary to see a lot of benefit from China.

However, he expects Starbucks to be a China play in the future.

Commenting on restaurant stocks in the U.S., Cramer reiterated his bullishness on McCormick & Schmick's Seafood Restaurant ( MSSR) and Ruth's Chris Steak House ( RUTH).

Land Grab

For the first time in 19 years, the real estate prices in Japan are rising, said Cramer. The situation is reminiscent of the U.S., which came out of a real estate depression in 1991. At that time, Cramer made a lot of money investing in Citibank.

The Citibank of Japan is Mitsubishi UFJ Financial Group ( MTU), said Cramer.

Although MTU's stock looks expensive and appears to have already bottomed, that "doesn't mean you missed most of the move," said Cramer.

If Japan's real estate market continues to recover, more and more people will be taking out real estate loans, he said.

MTU's earnings should continue to grow, and the stock won't look so expensive, he said. "If my restrictions would let me, I'd be buying some MTU."

In response to a question about Korea, Cramer said the Korea Fund ( KF) is "absolutely right" here. He would endorse KF as a trade and MTU as an investment.

Takeover Talk

With the recent slide in oil stocks, investors seem to have forgotten that "so much of oil is about Chinese demand," said Cramer, "and that isn't slacking at all."

Cramer pointed to the recent acquisition attempt by Chinese oil company CNOOC ( CEO) to buy Unocal in which CNOOC was willing to pay up to $9.25 a barrel for proven reserves, said Cramer.

Cramer believes CNOOC is still looking to make an acquisition, and "I'm betting that's going to happen," he said.

The three oil stocks that "might be most attractive on a valuation basis," said Cramer, are Suncor Energy ( SU), Petrobras Energia Participaciones ( PZE) and Occidental Petroleum ( OXY).

Based on recent stock prices, Suncor's reserves are valued at about $5.50 a barrel, said Cramer. Petrobras' reserves are valued at about $7.10 a barrel.

Occidental, while not as cheap on a reserve basis, owns a "gigantic chemical business," said Cramer, who believes that Occidental is the "most likely target for another CNOOC takeover attempt."

Occidental's stock is "too cheap in the $70s," he said. OXY ended the regular trading session Tuesday at $78.88.

Donny Deutsch, advertising executive and host of CNBC's "The Big Idea with Donny Deutsch," joined Cramer as a guest on the show to talk about advertising.

Duetsch said smart advertising holding companies such as Omnicom Group ( OMC) and Interpublic ( IPG) will be good long-term investments, but they "need to get their act together."

Lightning Round

Bullish

Cramer was bullish on Google ( GOOG), Duke Energy ( DUK), Powerwave Technologies ( PWAV), Automatic Data Processing ( ADP), URS ( URS), Lucent Technologies ( LU), Sirius Satellite Radio ( SIRI), H&R Block ( HRB), Altria ( MO), PetroQuest Energy ( PQUE), Capital One Financial ( COF), Joy Global ( JOYG), Medco Health Solutions ( MHS), Darden Restaurants ( DRI), American Express ( AXP), Cendant ( CD), Principal Financial Group ( PFG), Prudential Financial ( PRU), MetLife ( MET), Cypress Semiconductor ( CY), LSI Logic ( LSI), Texas Instruments ( TXN) and TurboChef Technologies ( OVEN).

Bearish

Cramer was bearish on Jefferson-Pilot ( JP), Andrew ( ANDW), Paychex ( PAYX), El Paso ( EP), Williams Scotsman International ( WLSC), AmeriCredit ( ACF), Warren Resources ( WRES), NTT DoCoMo ( DCM) and KFX ( KFX).

1. Pigs Get Slaughtered 2. It's OK to Pay the Taxes
3. Don't Buy All at Once 4. Buy Damaged Stocks
5. Diversify to Control Risk 6. Do Your Homework
7. Don't Panic 8. Buy Best-of-Breed
9. Defend Some Stocks 10. Don't Bet on Bad Stocks
11. Own Fewer Names 12. Cash Is for Winners
13. No Regrets 14. Expect Corrections
15. Know Bonds 16. Don't Subsidize Losers
17. No Room for Hope 18. Be Flexible
19. Quit When Execs Do 20. Patience Is a Virtue
21. Be a TV Critic 22. When to Wait 30 Days
23. Beware the Hype 24. Explain Your Picks
25. Find the Bull Market
At the time of publication, Cramer was long EnCana, Altria, Occidental Petroleum, Cendant and Lucent.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for ActionAlertsPLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict."